Explanation:

Distribution network is a system of activities that provide transfer of products between producers and final users. It is also known as distribution channel, marketing channel, distribution chain, distribution pipeline, market chain and trade chain. This network has two or more partners, so it has to be coordinated in the direction of order fulfilment and satisfied demand. As a partnership business network, distribution channels are very important, due to their role in responding to customers' requests.

Distribution channels could provide competitive advantage for all partners along the network, through shorter delivery lead time and higher product availability. Although the main purpose of distribution channels is providing continuous flows of products to customers, they should be designed to fill customer's demand with minimum total cost. Determining the right number of facilities and proper locations for distribution network is an essential issue for companies involved in the channel.